August 22: Asian session

US dollar advanced versus most of its major counterparts on Wednesday after minutes of the Fed’s July meeting showed that most members of the FOMC were “broadly comfortable” with Chairman Ben Bernanke’s plan to start reducing bond buying this year. Investors are now waiting for the release of manufacturing, housing and employment data later today which may signal continued recovery in the US, boosting the case for a reduction in central bank stimulus.

EUR/USD is consolidating in the $1.3360/30 range following the yesterday’s drop from $1.3430. Euro zone is scheduled to release a bunch of PMI figures today (7:00-8:00 GMT, data are expected to show growth). GBP/USD extends its post-Fed decline, touching $1.5590. Bank of England’s member Martin Weale increased the selling pressure by saying “UK can envisage circumstances where further QE may be needed”. USD/JPY rose to 98.33. Data on foreign investment in Japanese securities were negative for yen. USD/CHF recovered to 0.9250.

AUD/USD hit $0.8931 today before recovering to $0.9000. Australian dollar rebounded after a gauge of Chinese manufacturing indicated expansion: HSBC flash manufacturing PMI rose to 50.1 beating the forecast of 48.3. NZD/USD lost more than 130 pips yesterday and hit $0.7809 today before recovering to $0.7840. USD/CAD is trading slightly lower after having reached a fresh monthly high of 1.0500. Canada will publish retail sales figures at 12:30 GMT (forecast: negative).